Accounting Software for Amazon FBA sellers

For an ecommerce business, being an Amazon FBA seller is no less than a dream. It is one of the quickest and most trusted ways to reach a massive customer base, increase revenue, and eventually boost profitability.

The FBA in Amazon FBA stands for Fulfillment by Amazon. If you are eligible for Amazon FBA, the ecommerce platform handles everything from storage and packing to shipping and delivery.

All you have to do is send your products to Amazon. Your products are safely stored at massive warehouse facilities across different locations.

Once a customer places an order, the Amazon team does the rest. With FBA eligibility also comes Prime benefits, which essentially means more revenue. While there are many pros for a business owner, a lot of behind-the-scenes work is needed to ensure finances are in order.

This is where accounting software for Amazon FBA sellers proves to be important. An Amazon FBA seller must actively track handling charges, shipment fees, packing costs, international taxes, discounts, and revenue to ensure the finances are in order.

In this article, we will discuss the unique accounting needs of Amazon FBA sellers and the right accounting software to handle these challenges.

Understanding Amazon’s fee structure and its impact on accounting

The cost of selling through Amazon FBA depends on the product category, fulfillment model, product size and weight, storage profile, and other seller-specific variables. Without knowing the rates inside out and their impact on accounting, you cannot make informed business decisions.

Amazon’s fee structure comprises:

Referral fees + Fulfillment fees + Monthly storage + Long-term storage

1. Referral Fees

This is the fee Amazon sellers must pay to Amazon for each sale they make. In simple terms, this is the fee Amazon charges businesses to sell on their platform. The referral fee typically ranges from 5-15% and is automatically deducted upon sale. Most product categories have a minimum referral fee of AED 1, and for certain categories like baby products, the applicable referral fee percentage changes as per product value.

2. Fulfillment Fees

The fulfillment fee is the charge businesses pay Amazon for packing, handling, and shipping. It also includes some charges for the customer service Amazon provides on your behalf. These fulfillment fees are charged based on the product’s size and weight.

3. Monthly Storage

As the name suggests, the monthly storage fee is the price you pay Amazon to store your product at their warehouse. It is mostly charged based on the space it occupies. In the UAE, AED 2 per cubic foot per month is the standard monthly storage fee.

4. Long-Term Storage

Long-term storage fees apply to inventory held for extended periods, with thresholds and rates defined by Amazon and subject to change.

Setting up your Amazon FBA accounting system

Setting up a reliable Amazon FBA accounting system is crucial for a growing ecommerce business. With the right Amazon accounting software, your business can grow without being tied down by tax issues and financial discrepancies.

Relying on generic software, or worse yet, manual data entry via spreadsheets, is not the smartest idea. In this era of automation, you must choose the best accounting software that saves you time and yet delivers accurate financial data without extensive manual intervention.

When choosing the best accounting software for Amazon businesses in the UAE, look for the following features:

• Easy integration with Amazon Seller Central
• Automatic import of settlement data
• VAT compliance as per UAE regulations
• Corporate tax compliance as per UAE regulations
• Multi-currency support
• Automatic bank reconciliation

Integration with third-party tools such as A2X and NetSuite is also important. Here’s what each of these automation tools helps you achieve.

A2X

A2X is a specialized accounting tool bridging the gap between your Amazon Seller Central account and your accounting software.  Here are some of the key features that make it popular among Amazon sellers:

• Amazon Pay reconciliation
• Tax compliance
• Cost of goods sold (COGS) tracking
• FBA inventory locations

It turns raw financial data into easy-to-understand, consolidated bookkeeping entries.

NetSuite

NetSuite is the go-to platform for enterprise-level Amazon business. It is an all-encompassing ERP solution that integrates everything from the supply chain and warehouse management to accounting and operations. Advanced features such as inventory management features, customizable workflows, and high-volume transactions make NetSuite an asset for large-scale Amazon FBA sellers.

Why proper accounting and bookkeeping matter for Amazon Sellers

You cannot build great businesses without proper accounting and bookkeeping in place. The larger picture, including unit economics, marketing budget, and discounts, all boil down to getting basic accounting and bookkeeping right.

For instance, one of the biggest mistakes some FBA sellers make is recording the amount received from Amazon as sales.

This can be misleading because Amazon payouts are net of fees, so fees and expenses must be recorded separately to reflect true revenue and profitability. A clear and accurate bifurcation helps you understand the net income and profit, empowering you to make the right business decisions.

A generic accounting software might not have the required features to track, record, and analyze complex financial data. A specialized software for Amazon sellers seamlessly records financial data, including:

• Total sales revenue
• COGS (Cost of Goods Sold)
• Refunds
• Returns
• Taxes
• Marketing spend
• Amazon fees

In turn, proper accounting and bookkeeping help Amazon sellers track and analyze:

• True profitability
• Cash flow visibility
• Tax compliance
• Business growth

Managing inventory and cost of goods sold (COGS)

An Amazon seller does not have physical control over the goods once they are shipped to the Amazon facility. This makes managing inventory and cost of goods sold (COGS) trickier than usual. Here are certain factors to consider while managing inventory and COGS:

• The goods are stored across multiple warehouses in different locations
• Limited visibility into detailed inventory movement between fulfillment centers
• Goods may get damaged or lost 
• Damaged products returned or replaced by customers
• Storage fee 
• Variations in shipping costs
• Delayed inventory reports from Amazon

Specialized Amazon accounting software can significantly simplify tracking and improve accuracy, particularly for high-volume sellers. Investing in such software will not only save you time and effort but also provide accurate data to improve profitability.

Cash flow planning and reconciliation of Amazon settlements

Reconciling your books with Amazon settlements and other related transactions is important because it helps:

• Match internal inventory with financial records
• Identify hidden charges, discrepancies, or settlement errors
• Identify unaccounted refunds and returns
• Accurately separate gross and net earnings
• Identify expected cash flow by understanding Amazon’s payment cycles
• Ensure that your financial records are audit-ready

Gathering data, matching orders, calculating gross revenue, bank matching, and investigating discrepancies are key steps in the reconciliation procedure. Regular reconciliation ultimately helps you avoid cash flow crunches, and fortunately, this process can be automated via Amazon accounting software.

Accounting services for Amazon sellers: When to hire a professional

There is nothing more important for business owners than time. If you are an Amazon seller in the UAE, you must do all in your power to avoid being tied down with mundane, time-consuming, repetitive tasks such as accounting. Only then can you focus on the bigger picture and work toward increased profitability.

Accounting for an Amazon FBA seller can be complex, to say the least, but hiring an accounting professional is recommended only once your business can afford it.

Low-volume transactions can be easily tracked and analyzed without a professional accountant.

However, once sales volume increases, you must not delay hiring a professional firm like skrooge.ai to keep up with the increased financial transaction volume.

Best accounting software for Amazon sellers

Software	Key features for UAE Amazon sellers	Pricing	Pros	Cons
Zoho Books	VAT-ready accounting, invoicing, bank reconciliation, expense tracking, inventory support, multi-currency, and strong integration with the Zoho ecosystem	AED 0 to AED 790 per month	Best value for UAE SMEs, clean interface, and suitable for businesses that want simple accounting with VAT support	Amazon FBA automation is not as deep as specialized connector-based setups, so larger sellers may need add-ons
QuickBooks Online	AI-powered bank feeds, multi-currency support, invoicing, customer management, and custom report generation	AED 77 to AED 327 per month	Well-known globally, widely used by accountants, and flexible third-party integrations	Often needs extra tools for accurate Amazon settlement reconciliation and UAE tax reporting
Xero	Automatic bank reconciliations, inventory management, real-time reporting, and integration-friendly setup for Amazon sellers	$29 to $75 per month	Strong reporting, easy-to-use for accountants, and scalable cloud accounting	Amazon automation usually depends on a connector, which increases setup and subscription costs Lack of UAE-focused features
Wafeq	UAE-focused accounting, VAT compliance, invoicing, payroll, expense tracking, and multi-currency support	AED 690 to AED 2,400 per year or more	Good fit for UAE compliance, local business needs, and companies wanting a regional accounting platform	Less established globally than QuickBooks or Xero, and Amazon-specific workflows may be more limited

How do I reconcile Amazon Seller Central (ASC) reports with my accounting software?

Here’s a step-by-step guide to reconciling ASC reports with your accounting software:

• Log in to your Amazon Seller Central account
• Export transaction report
• Open your accounting software
• Import the transaction report 
• Match the transactions

Reconciliation is important to ensure that the financial data from Amazon matches the records in your accounting software. Cross-checking gross sales, shipping costs, refunds, returns, tax, and fees during reconciliation helps avoid discrepancies.

Tax considerations and compliance for Amazon FBA sellers

For Amazon FBA sellers in the UAE, most of the tax considerations and compliance are related to value added tax (VAT) and corporate tax. Amazon sellers may need to register for VAT as well as corporate tax.

Value added tax (VAT)

A business must register for VAT if the value of its taxable supplies and imports exceeds AED 375,000 over the previous 12 months, or is expected to exceed that threshold in the next 30 days. Voluntary registration is available where taxable supplies and imports, or taxable expenses, exceed AED 187,500.

For non-resident sellers, VAT registration can be mandatory if they make taxable supplies in the UAE, even where the normal threshold is not exceeded, unless another party in the UAE is responsible for settling the VAT on those supplies.

Once you are VAT-registered, you have the opportunity to recover (fully or partially) the input VAT you paid.

Most goods attract the standard 5% VAT, while some attract a 0% VAT, and some goods are exempt. The difference between zero-rated VAT and VAT exempt is very important since you cannot recover input VAT on exempt supplies. Input VAT recovery is available only for standard-rated and zero-rated goods and services.

Corporate tax for Amazon sellers in the UAE

The corporate tax registration deadlines vary by entity type.

If your Amazon business was incorporated in the UAE, typically, you must complete the corporate tax registration within 3 months of incorporation.

Corporate tax registration and filing can be easily done on the government’s EmaraTax platform. Here is a clear breakdown of the corporate tax for better understanding.

UAE Corporate Tax Rates For Amazon FBA Sellers

Taxable Income Tier	Tax Rate
Up to AED 375,000	0%
Over AED 375,000	9%

FAQs